After an estate plan was carefully created, modified, and executed during the decedent’s lifetime, the next step is for it to be implemented after the creator passes away. Estate plans involving living trusts may have the added benefit of avoiding the need for and expense of a probate administration. Regardless of whether this trust plan avoids probate, however, there are still costs associated with trust administration. One such cost is the fee paid to the trustee.
Factors That Can Increase a Trustee’s Fees
Generally, the fees paid to the trustee will represent a reasonable reimbursement for the work needed to carry out the trust’s administration. In some cases, these fees may increase due to certain factors. These factors include the following:
- If there are disputes among the beneficiaries of the trust as to the terms of the trust
- If the validity of the trust is challenged
- If the trust must deal with multiple creditors
- If the assets of the trust are spread across multiple states
- If there are many beneficiaries of the trust
- If a beneficiary of the trust is involved in a bankruptcy, lawsuit, or divorce
- If the trust has substantial tax issues to address
- If the trust has provisions that are unclear or open to interpretation, requiring court involvement
- If the beneficiaries of the trust are difficult to locate or communicate with
- If the assets of the trust are difficult to manage
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